Tuesday, June 30, 2015

A long time ago I took a college course in creative writing. The instructor encouraged us to use our imagination to write stories, fact or fiction. Just make sure it is entertaining.

Seems an insurance agent in North Carolina decided to do his own kind of creative writing.

Using a bird dog, Charlotte agent Will Kennedy submitted some 600 Obamacare applications in a relatively short time frame.

All from homeless people.

Many with the same address.

And all having exactly $11,700 in projected income.

Just enough to qualify for the maximum subsidy.

If you look beyond the questionable tactics, otherwise known as creative writing, there is this.

Huggins is among dozens in Charlotte who are learning that their “free” coverage requires them to cover a $5,000 deductible and costs them eligibility for some of the free medical services they’ve relied on.

“We have people who really need their medicine, and we can’t give it to them,” said Susan Royster of Charlotte-based NC MedAssist, which provides free prescription drugs for the uninsured. - Charlotte Observer

What's that mean? It means that large employers will have to send these forms to covered employees (kind of like W-2's or 1099's), which employees will then need to enclose with next year's tax returns. The ostensible reason is to allow the Feds to confirm that said taxpayer did, indeed, have appropriate coverage.

Exit question: who really believes that these forms won't ultimately result in additional taxes?

■ A few short weeks ago, it was the prospect of UHC eyeing Aetna, and Anthem smacking its lips over Humana. But things are never what they seem:

First, consider me gobsmacked: I coulda sworn that UHC occupied the #2 slot. Second, expect this kind of consolidation to continue as profit margins shrink and companies vie to position themselves as administrators of the coming Single-Payer scheme.

■ Folks in smaller groups ought not be pointing and laughing at Item #1 above:

Well, those considered "small groups" have more stringent coverage requirements than their larger brethren, including the "10 Essential Health Benefits" mandate. Net result: "an immediate impact on premiums due to new rating rules."

The "Hello, Goodbye" song by the Beatles could be fitting in light of the

SCREWTUS decision on same sex unions. The New York Times finds that some companies with domestic partner health insurance coverage may say goodbye to those benefits now that there are no barriers to marriage.

Some large employers — including Verizon, Delta Air Lines, IBM and Corning — already have. They rescinded domestic partner benefits to employees living in states where same-sex marriage was legalized and replaced it with spousal coverage. Last July, Verizon gave its employees until the end of the year to decide whether to marry. IBM gives employees a one-year grace period, though a spokeswoman said the time frame was under review; Delta said it provided a grace period as well, about two years. And some states have sought rollbacks as well. - NYT

Thursday, June 25, 2015

Indeed. Why would a state - any state - continue to throw money and other resources into maintaining their own HIX? Actually, there's a delicious irony here: Herr Gruber himself maintained that the law was written to encourage states to set up their own Exchanges (in order for their citizens to qualify for subsidies). Absent that bribe, er, motivation, the only rational action is to move your folks to 404Care.gov.

■ FoIB Allison Bell wonders about the implications of a failed Palmetto State CO-OP, which left (on average) some $2,400 per enrollee in unpaid claims. Some are covered by their states' Guaranty Fund, but some aren't. It depends on whether or not the plan is considered a MEWA, and thus not eligible:

This could prove to be a major problem as these types of plans continue to fail.

■ Ever heard of Bitcoin? It's a non-government-backed "virtual" currency that's become attractive as both an alternate payment method and an investment strategy. But it's also risky business: with no government to backstop it, what happens if the value collapses? And since it's virtual (that is, completely on-line, with no physical analog), there are added cyber-security risks, as well:

On the one hand, I'm not convinced that **any** risk can be "reduced to zero" (else it's no longer "risk") but the point here is that the currency is now ubiquitous enough that it represents a significant risk factor for businesses.

Tuesday, June 23, 2015

Our on-going Stupid Carrier Tricks series is generally over-represented, so it's nice to be able to add one on the positive side. Medblogger Lisa Emrich daily chronicles her thoughts and strategies as she battles MS; she also reports significant events on Facebook, where she recently posted this:

"Some readers doubted my description of an insurance company who pays much more than hospital charges for an infusion. See details from the EOB."

That's right, they actually allow a greater amount than what her provider ended up charging her, and this was in turn reflected in her balance due. And, of course, the amount she pays in co-insurance helps reduce the balance for the rest of the year. Reason I mentioned her Grandfathered status is that this plays a role in the overall scheme of things. Lisa tells me that "I absolutely appreciate the 10% coinsurance which is why I've kept this grandfathered plan. After Carefirst processes the 2nd infusion (in June), I will have fulfilled my max OOP (for medical) for the year." Nice.

Bottom line: it's nice to know that some carriers really do try to help out their insureds whenever possible. Chalk one up for the good guys.

I think this is overly simplistic: as I mentioned in Part 1, insurance as risk-management tool has more to do with the severity of the potential loss rather than the frequency (although that’s certainly a factor). This explains, in part, the popularity of co-pay health insurance plans vice HSA's: few of us would go broke paying for a simple doctor's visit or common prescription, but we've been conditioned to "let the insurance pay for it." Regular readers will spot the fallacy there.

More disturbing, though, is his contention that "the benefit structure [of LTCi} doesn’t protect against catastrophic expenses." This is a common misconception of how LTCI works and what it's really designed to do, and for that I blame not David, but my industry. The story we've been told to tell is that you buy LTCi to pay for care. This is correct, but misleading: there is no realistic way to buy a plan that will completely cover the costs of a major claim (or series of claims). Anyone that could afford to buy such a plan would be much better off self-insuring.

No, the role of LTCi is to supplement one's assets (and a Partnership-compliant plan is a terrific ally in that quest), and to buy "choice."

What does that mean, Henry, "choice?"

It means that having the ability to pay for care oneself opens up a lot more doors (as regards facility and resource availability) than folks dependent on Medicaid will see. Is that fair? Doesn't matter. Is that real? Yes.

David then writes about his own experience in considering a plan, and noted that what he was shown had very little in common with what he wanted. This is a failure of either David (for not sharing his vision with his agent) or the agent (for not listening to David). I don't know his agent, but I have a very difficult time believing that David was less than forthright and explicit in his request. On the other hand, I know from experience that clients are generally less knowledgeable about these plans than they might think (which is no indictment: they've been served a long line of carrier and industry propaganda). My very first step when asked about LTCI by a client (or potential client) is to point them to our primer on when one should consider buying a plan, and what to look for.

David does describe his ideal plan: "a policy with a 5 year elimination period and no cap on the benefit period." Such a configuration does not, to my knowledge, exist, but it seems to me that there ought to have been some common ground between what the agent had available and what David wanted; unfortunately, that doesn't seem to have been the case (or so I inferred from the post). Does that make David a "narrow framer" (in the context of the WSJ post)? Hardly: in fact, he seemed crystal clear in what he wanted and not distracted by the minutiae.

Where I think he veered off course is in not considering other reasons to buy a plan, and I hope that he takes the opportunity to revisit that decision. I'd be happy to refer him to a pro.

Friday, June 19, 2015

The Oregon Dept. of Insurance doesn't think consumers are paying enough for health insurance and wants to see the rates go higher.

The Oregon Insurance Division says it is pushing health insurers to charge higher individual rates in 2016 because they are reporting huge underwriting losses for 2014.

The insurers collected just $703 million in premiums for 2014 and spent $830 million on 2014 claims, officials say. - Life Health Pro

Normally the DOI wants to see lower rates, not higher. So what gives?

"That means consumers are not overcharged for health insurance, but it also means that rates must cover the cost of patients' medical bills," Calli says. "We have proposed increased rates in order for consumers to continue counting on the coverage they have purchased."

In other words, if the carrier isn't charging enough the state has to step in and take over.

What's particularly troubling is that "[t]he figure is nearly three times the $234 million in losses suffered through the first three quarters of 2014 ... It means that the burn rate for the experimental Obamacare co-ops is quickening."

Maybe that's a good thing, though: the faster it burns up, the sooner we can start having a serious discussion about alternatives (and reality).

Our good friend David Williams has written a blistering review of a recent WSJ article on why people aren't buying Long Term Care insurance (LTCi). Before addressing his concerns, I'll offer my own thoughts on the piece:■ Based on the results of their study, Drs Olivia Mitchell and Daniel Gottlieb "found that many people regard long-term-care insurance as having no real value if ultimately the payouts aren’t needed.” It's said that people rarely buy insurance: it must be sold (to them). This would certainly hold true regarding LTCi; as agents, we do a terrible job of selling it, which seems to validate this particular conclusion.■ The article goes on to note that "instead of looking at long-term-care insurance primarily as financial protection, many people think of it as an investment—and a bad one at that." And they're right, of course: it is a terrible investment. But then, a dump truck is a lousy commuter vehicle, and my oven does a terrible job of washing my dishes (well, there was this one time I inadvertently left a plate in on the "self-clean" cycle, but that's another story).Insurance is a risk-management tool, not an investment. No one expects to make a profit on their homeowner’s policy, either, but we still insure our homes. That's because, as David points out, the downside of a catastrophic loss far outweighs the cost of a policy.■ The real meat of the article, though, and the part with which David seems most frustrated, is this:"[O]ur research suggests that some consumers’ rejection of long-term-care insurance is based on what psychologists call “narrow framing,” or people’s tendency to exclude key factors when making decisions."As the authors point out, this is often the case when faced with making a decision about something as complicated as LTCi. It is much easier to convince oneself that "if I can't understand it, I must not really need it." Something about "the path of least resistance" comes to mind.Where I think the conclusions fall apart is this rather innocuous-sounding sentence: "[W]e believe that insurers could better position their products in the marketplace by providing more information to consumers regarding the high probability of needing care, and the high costs of such care."Bullcrap.For one thing, we already do that: look at any product brochure or marketing piece, and the stats are right there in big bold letters, charts and graphs. It seems to me that piling on would simply reinforce the "narrow framer" mindset.The authors do get this one right: "focus more marketing toward adult children whose parents will likely require nursing-home care;" the idea being that they will pay for their parents’ policy as a means of preserving their parents' estate (and thus their own inheritance). The problem with this strategy is that you still have to get the parents' buy-in, and who's to say that they're not "narrow framers" themselves?Finally, the article suggests that insurers should "emphasize policies that provide benefits in addition to protection for long-term-care costs. For example, more policies could include retirement income payouts or life insurance"This skirts the issue, because the more benefits you throw on a plan, the more expensive it's going to be (whether broken out as riders or simply "baked into the cake"). Making LTCi more expensive seems counter-productive.Interestingly, the article fails to mention one of the most valuable, easily understood benefits of LTCi, one which addresses pretty much all of their concerns: the Partnership Program. Pointing out that a properly constructed plan will help keep the Medicaid folks at bay makes for a very compelling argument that even "narrow framers" would find hard to resist.Okay, so that's the WSJ; what about our friend David? Well, seeing as how this post is up to almost 700 words already, click here for Part 2.

Thursday, June 18, 2015

Obamacare was going to fix all that was wrong with health insurance. No more plans that exclude coverage or cause consumers to go bankrupt over unpaid medical bills.

Tell that to Marlene Allen.

Marlene Allen thought she had decent medical coverage after she fell in December and broke her wrist. She had come in from walking the dogs. It was wet. The fracture needed surgery and screws and a plate.

Weeks later, she learned her employer health plan would cover nothing. Not the initial doctor visit, not the outpatient surgery, not the anesthesiology. She had $19,000 in bills. - Kaiser Health News

And her employer health insurance plan paid .................. $0.

The employer plan only met the spirit of the law in providing minimum essential coverage. In this case the minimum was "Preventive Services Only".

That's what her insurance card said. I guess she didn't read the card or the summary of benefits before signing up for this minimum coverage.

To make matters worse, the advice given by the folks at MNsure was less than stellar.

Actually it was downright criminal.

Except there is no one to be held accountable at these exchanges. You place your bets and they take your money.

After she learned that her work plan covered hardly anything and tried to get back on a marketplace policy, MNsure told her she’s not eligible for subsidies to buy it. Wrong again.“Horrible situation,” said Sabrina Corlette, project director at Georgetown University’s Center on Health Insurance Reforms. It “does make you wonder about the training these call-center folks are getting.”

Yeah, it does.

But didn't the president say buying health insurance was as easy as going online and buying an airplane ticket? How much training to ticket agents get?

I don't know but I suspect it is more than these exchange phone clerks get.

Right after they skim off their vig, I'm sure. But what's behind this?

Well:

"They are specifically angling to say that we do not represent them, that we would be engaged by the customer and that therefore they have absolutely no obligation to pay us"

Sounds about right.

Of course, it's Aetna's prerogative to do pretty much anything it likes, but there are always those pesky consequences. For one thing, it's possible (likely?) that this violates MLR requirements.

How's that?

Well, premiums are calculated based on a group's demographics, location and the like, but they also include the commission. Nothing in the announcement indicates that premiums will be reduced based on the carrier's lower cost (perhaps they're emulating the old Blue Cross model?).

I haven't received my copy yet, so I'll withhold judgement until then. But I'm pretty sure I know my response should this prove out.

So, Medical Mutual of Ohio sent me a new Broker Agreement form (essentially the contract that allows me to sell their products and receive a commission for doing so). Very standard, very simple, no big deal.

Except:

The form is 13 pages long, and only 3 of them require any input (name and contact info, signature). So, I print off and complete those 3 pages, scan them back in (and could somebody explain the rocket surgery in emailing an electronic form which then needs to be printed out, then scanned back in?) and hit the send button.

Easy peasy lemon squeazy.

Or so I thought.

This morning, I'm greeted with this:

Good MorningOur legal department requires at all 13 pages are returned .I have attached a new blank document for your use Please complete Page 1 – List your name Page 11 – your contact information Page 13 – Sign and print your name and added your NPN Number Return all 13 pages pleaseThank you

Um, Einstein's? Those were the three pages I sent you; the rest is boilerplate. But I'm now supposed to print out 10 more pages of your idiotic verbiage? How bad is it when I'm complaining about killing trees?

Boston Health News blogger Tinker Ready hosts this week's roundup of of wonky posts, with an emphasis on the upcoming King/Burwell SCOTUS case. As usual, the posts are interesting and thought-provoking (and don't miss the roll-out of a new term: "horrendoma").

That is "the subsidies also served to mask the significant health insurance premium increases that would inevitably result from the law’s new insurance benefit requirements and regulations."

Of course, the current meme-of-the-day is that current rate hikes are "modest." Try telling that to my clients facing double-digit increases, and essentailly no options if they want to maintain comparable coverage.

■ And in Blast-From-The-Past news, the home of RomneyCare continues to embarrass itself:

50 years ago Peter, Paul and Mary asked "Where have all the flowers gone?". This folk song originally written by Pete Seeger became a classic in the early 60's when recorded by the Kingston Trio, the Four Seasons, Joan Baez, Peter, Paul and Mary and several others.

The song was sung at "peace rallies" and adopted as a war protest song.

Fast forward to 2015. There are still wars, soldiers that die way before their time and families left to ponder what could have been. Now the OIG (Office of Inspector General) is asking a different question.

Where has all the money gone?

Apparently the folks in DC can't account for all the subsidy money paid out under Obamacare.

as “we await a Supreme Court decision that could have a huge impact on ObamaCare” and revealed “just how much confusion the President's health care law is causing with book keepers.”

In a live shot from the White House, correspondent Kevin Corke explained that the 39-page report contained “a number of recommendations about how to deal with a potential accounting gap between what the administration has been paying insurers under ObamaCare and what it may ultimately end up owing.” - Newsbusters

Potential accounting gap.

Say what?

“[t]he problem actually lies in the healthcare.gov web site and its unfinished back end” where insurers are supposed to “communicate enrollee information with [the] federal government,” but have not been fully able to do so to the tune of “almost $2.8 billion in subsidies or tax credits to insurers in just the first four months of 2014.”

And in the middle of everything is the STILL UNFINISHED healthcare.gov website.

Your government has shelled out $2.8 BILLION in premium subsidies cannot be tracked to particular individuals or policies. At this time they don't even know if they legally owed that money or not.

To make matters worse, the audit only covers the first 4 months of 2014.

Perhaps we need our own protest song. Too bad Pete Seeger is no longer with us. We could use his talents right now.

Well, it used to be a dog-eat-dog world out there, but lately the prevailing metaphor would seem to be big fish eating smaller ones. There's always been a certain amount of consolidation in the insurance biz, but that appears to be heating up of late as The ObamaTax kicks into high gear. Cases in point:

Given that Anthem and UHC are the two 800# gorillas in the room, it no longer seems improbable that someday, in the perhaps not-too-distant future, we'll be down to two mega-carriers. On the one hand, this would be good for stockholders of both (and, one supposes, those of the smaller companies they swallowed up).

On the other hand, this doesn't bode well for fans of a competitive, free market. Competition breeds innovation and helps push down costs, but it's not clear to me that having two such behemoths left as the last ones standing would be to society's benefit.

On the gripping hand, it would certainly make the transition to single-payer (the true goal of the ACA) that much easier.

Now let's suppose that I (who have not yet reached that august age) do, in fact, patronize a store that offers a GB discount. Am I "losing" that discount (aka subsidy)? No, since I don't qualify for it. It really is that simple.

What's frustrating (albeit not surprising) to me is the wailing and gnashing of teeth, as if the evil folks who dare to upset the subsidy applecart are somehow the villains. No, they are not; that would be the bureauweenies (primarily the IRS) who granted them to ineligible folks in the first place.

Thanks to (allegedly) Chinese hackers all the dirty little secrets that are stored in government warehouses will now see the light of day.

The hacking of the White House Office of Personnel Management (OPM) could provide a treasure trove for foreign spies.

When a retired 51-year-old military man disclosed in a U.S. security clearance application that he had a 20-year affair with his former college roommate's wife, it was supposed to remain a secret between him and the government.

The disclosure last week that hackers had penetrated a database containing such intimate and possibly damaging facts about millions of government and private employees has shaken Washington. - Yahoo News

If you ever applied for a job with the government, applied for taxpayer funded assistance or needed a government loan, your secret information may no longer be secret.

The man had kept the affair secret from his wife for two decades before disclosing it on the government's innocuously named Standard Form 86 (SF 86), filled out by millions of Americans seeking security clearances.

Now the government and the Chinese know.Has he told his wife yet?So just how much information is needed for Standard Form 86?

The SF 86 form, which is 127-pages long, is extraordinarily comprehensive and intrusive.

Among other things, applicants must list where they have lived; contacts with foreign citizens and travel abroad; the names and personal details of relatives; illegal drug use and mental health counseling except in limited circumstances.

This is not good.

FROM HGS: Pardon the piling on, but it ain't just OPM and the military (past, present, and possibly future) at risk:

Get that? Even if you ultimately decided not to enroll, your personal medical, financial and credit information is potentially at risk. Now, the investment folks always warn that "past performance is not necessarily indicative of future results."

Friday, June 12, 2015

Unless you have been living under a rock for the last 5 years, you probably know about Obamacare. You might not know everything, but you should have at least heard of it.

Even still, there are people that apparently never watch the evening news, listen to the radio or read a newspaper.

About half of those living in Kentucky and classified as poor were not aware of the basics of Obamacare.

Since the fall of 2013, Medicaid enrollment in Kentucky has jumped by more than 500,000 people, or 88 percent, the highest increase in the country. Another 109,000 people have enrolled in a private health plan through the state’s exchange. - KHN

Well apparently the word is getting out somehow.

Interesting to note, but not all that shocking, that Medicaid enrollment is 5x the number enrolled in private health insurance.

While 49.5 percent of Kentucky’s poor said they heard little or nothing about the coverage options in the health care law, an earlier survey by the Foundation for a Healthy Kentucky found that only a third were unfamiliar with “Kynect,” the Kentucky exchange.

Kynect sounds like children's building blocks. Maybe a name change is in order?

Another factor in low awareness, he said, is that many poor people lead busy lives and don’t make health insurance a priority when they are healthy.

Poor people have not cornered the market on having no interest in health insurance until they need it. I get tired of hearing people say they want to pay for something they probably won't ever need.